If anyone is hoping for a turn-around of the European car market, be it Opel, PSA, or Pch101, January definitely was not the month it happened. Some people, who get paid a lot of money for a very long-term vision, believe we have to wait years for the turn-around. The French car market dropped 15 percent in January, with “Volkswagen and U.S. carmakers leading the drop,” Reuters reports. Massive sales subsidies of 2,000 euros ($2,700) per car, reintroduced in October in Spain, could not reverse the Spanish market. It dropped 9.6 percent.

Renault did beat the market with only a 7.4 percent drop. Reuters says this was due to “a 9.9 percent gain for its low-cost Dacia brand, as scarce buyers gravitated to “crisis cars” such as the no-frills Sandero compact and Duster SUV.”

16 Comments on “France Is Going Down On Us...”

All of this again proves that whoever it was inside of Renault-Nissan that decided to prop up Dacia, dust it off, give it modern products and launch it onto the world stage, should have a statue made in his honor. Quite the visionary coup.

GM of France was down 21.2% while VW was down 23.9%. Does that constitute much worse? I suppose VW could have had a much larger market share, so the impact was much worse, but that hardly presents a new rationalization for pumping more money down the Opel toilet. Opel would need huge sales growth just to get back to where they were when their footprint made sense, not merely smaller losses of volume than whoever is doing the worst in any particular month in a declining Europe.

Maybe it’s just me, but I just don’t “get” Dacia’s lineup. I understand everyone’s flocking to the Logan, Sandero and Duster because they’re dirt-cheap compared to everything else on the market, but why? Is there something that I’m missing? Or maybe it’s because I’m not particularly interested in these cars myself…

Yes, you are. Fiat engineers are very impressed with the line. I’ve heard them mention the word honest many times when talking of the car. When you buy one of them, the exterior styling is conservative, inside it’s not much better. But they’re puttogether well, there are no great ergonomic mishaps. The drive is fine. It has kept traditionally good Renault road manners. The driving position is sound, steering wheel, seats, pedals are almost perfectly aligned. Good and wide footwells for big feet. Tall roof for tall people.

FInally, what I believe is the main selling point. Compare a Logan to a Corolla. The Toyota is longer and maybe a hair wider. But the Logan’s wheelbase is longer than its Japanese rival. The trunk is bigger by a good margin. So you get more interior space than in Corolla. More interior space than Polo, Fiesta, Focus, Sonic. The ride is competent and the pricing is along the lines of such things as Ka, up!, Panda. But it’s bigger! So you see, people the world over are not much different from Americans. Big can be good. In BRazil at least its the cheapest car in the market to insure.

So it’s a lot of car for the price of cars a class down. It won’t appeal to your emotional side. But it constantly nags at your rational side. All things is considered, there’s just so much value. No other car can compare in terms of cost benefit.

The thing that gets me is that there’s no magic to the Dacias. Just good but obsolete platforms using basic tech and no frippery. Sell it at a decent but not outrageous markup. So where are the others? Every co. has something that they can leverage to get into that space.

I was amazed that VWoA canceled the City concept in Canada. It looked like a huge success going by how many I see in Toronto and area. Same idea, decent car, excellent pricing, sell tons.

According to Fiat engineers I talked to your summary is correct. Except for one thing.

There is some black magic (like Bertel calls it) going on. Namely the processes. Accroding to those guys, the standard industrial processes could not produce a car like that, at the price point. Things like upright windows take some novel approaches to buid satisfactorily. Renault did invest some money in coming up with these ideas. The competitors can’t copy it straightaway as it would take time and money. That’s the magic, it’s an old car, but it’s not an old car since the processes to build it are new (the competitors cars by comparison would just feel like old cars). Could well take a dedicated factory to do it. Therein lies the connundrum for others to copy Renault-Dacia.

Don’t be amazed that VWGC cancelled the City models. It wasn’t their choice. Older platforms can be sold economically as long as they remain older platforms. As government regulations change from year to year, older platforms require varying levels of engineering support to remain compliant. At some point, the cost of achieving compliance exceeds the market value, and the product disappears. It’s sad, but apparently we’re all safer, healthier and happier(?) because our government is looking out for us.

It’s obvious what Europe needs: more cheap credit! That’s how they pumped their housing boom, and now it’s the auto industry’s turn. 1% financing, no money down, no credit check. With autos leading the way, housing prices will recover, people will start refinancing again, the banks will do banner business and Europe’s economy will boom again! I think they call it ‘pulling yourself up by the bootstraps’. The first tug is the hardest, but like pushing a stalled Peugeot, once you get moving, it’s much easier.

I am sorry, but the patient is well beyond what cheap credit could fix. These numbers are after massive doses of zero percent financing, rebates up to 30%, and more. Even Spain’s $2,700 straight subsidies did not help.

According to stock and bond markets everything is fine in Euro Kingdom. Is it ripe for surprise? How Koreans and Chevrolet sell in France? How many cars are burned in France daily – does it affect market?